What if you didn't have to think about managing your belongings anymore and there is someone else who guarantees that all your wishes are fulfilled when needed? That would give you peace of mind and the opportunity to focus on really important things! That is why, in both the consumer and professional market, you see an increasing shift from buying products to paying for the function of the product. A few examples:

• Ten years ago, every student bought their own bicycle and tried to ride it for as long as possible. Nowadays, the SWAP bicycle has become an indispensable part of the street scene. SWAP does not sell bicycles but guarantees transport by bicycle (repairs, replaces, etc.).
• Almost everyone still has a car. But, why would you own a car if it is not used (on average) 90% of the time? Shared transport is on the rise. You open the car with an app and only pay for the time and kilometers you have driven. You no longer own a car, but you can use car transport at any time.
• At Aebi Schmidt you can buy a salt spreader, but you can also purchase the 'clean road' service. In this way, Aebi Schmidt takes care of all the worries about the management and use of salt spreaders.
• Bouwatch does not supply cameras that can be used to secure a building site, but guarantees 'security'. The images are evaluated centrally and suspicious situations are forwarded to an emergency room for further follow-up.

Offering a product as a service is called 'servitization' and the associated services 'servitized products'. Servitized products have advantages for both the customer and the producer. The customer no longer has to worry about managing products and the producers receive a stable revenue stream in return.

This development is continuing and it is not only something that large companies have to take into account. We have a growing number of examples of SMEs offering servitized products. That is why, as part of the EPLM (Extended Product Life Cycle Management) project, a study was conducted into successful working methods for organizations that offer services instead of a physical product. A total of seven interviews were conducted with companies that were thinking about or were already working on servitizing their products.

When should you, as an SME, think about servitization? In the interviews we had, the following situations were mentioned in which the introduction of servitized products should be seriously considered:

• There is a customer need and therefore a market demand. Introducing a service takes away worries or operational hassles for the customer.
• You want to prevent the customer from seeing your product as a 'commodity', so that you can easily be exchanged with other suppliers and the relationship with the customer is lost.
• You have a knowledge advantage over the customer with regard to the use of the product, which allows you to manage the resources better than your customer.
• You can collect a lot of information about the use by selling the product as a service. With this information, maintenance can then be carried out more cheaply (predictive maintenance) or better products can be developed. This reduces the cost of use.
• You have a longer 'time horizon' than the customer, so that you can subsequently use a 'refurbished' product for other customers or reuse the product in a different way.

Most companies that start with servitized products already supply products with the option of linking services to them. For example with maintenance contracts. In that case the introduction of servitized products is only a small step. Nevertheless, there are a number of things that were labelled ‘essential for a successful implementation’:

• Involve the customer early in the development because you avoid thinking inside out.
• Structure the service into clearly recognizable packages. This provides clarity both internally and towards the customer.
• Keep risks that you cannot influence out of the contract.
• The service organization or 'after market' activity must be a clearly recognizable unit in the organization with its own KPIs. The degree of independence can vary from a department in the organization to an independent company. The degree of independence is a trade-off between independence/recognizability/flexibility on the one hand and inefficiency due to, for example, the double organization of knowledge/customer contact or mutual competition.
• If data about the operation of the product or the use of the customer is monitored, good security is necessary. Think of a secure connection, prevent the product from being hacked, ensure good algorithms to analyze the large amount of data.
• By providing products as a service, you become a 'partner' for your customer. So make sure that your suppliers are also your 'partners'. Partners must fit the organization in terms of size and culture. Last but least. Make sure that your successes are also successes for the partner and vice versa. Your nightmare is also the partner's nightmare.
• Think about a good partner for financing the products. By offering products as a service, the 'hardware' remains on your balance sheet and it must be financed.
• Ensure good change management, not only internally but also externally. Internally, it must be clear to everyone what organizational success means and what everybody’s contribution is. Externally, customers need to change their perception of your organization. You are not merely a product supplier, but a service provider as well.

The full description of the study can be downloaded via this link.